Songwriters want to get paid for 30-second song previews

Songwriters, composers, and music publishers are lobbying Congress to …

Just when it seems the music industry is starting to come around to the realities of digital distribution, groups representing songwriters, composers, and music publishers are hoping to tack on additional licensing fees to music downloaded online. If fact, the group would like to earn performances fees even from the 30-second previews you can hear when you browse the iTunes Store.

Licensing issues with iTunes or other digital distributors is nothing new. The complexities of licensing are a major part of the reason why many countries can't buy or rent movies from the iTunes Store, why DVDs of TV shows and sometimes movies are released with alternate music, and why some episodes of TV shows aren't available for streaming via Netflix's Watch Instantly feature.

Licensing has also been an issue for musicians. Eminem's former production team tried to sue Universal for greater royalties on the Detroit-based rapper's music when it is downloaded from iTunes versus being purchased on CD. The argument was that Universal was licensing the music to Apple to sell via iTunes, and therefore should qualify for a much larger royalty attached to licensing instead of the smaller royalty paid for distribution.

The problem, as the music industry sees it, is that songwriters and publishers are not getting performance fees for things like music that plays in the background of movies and TV shows, music streamed via iTunes' "Radio" feature, and perhaps most bizarrely, the 30-second song previews that you can listen to so you can decide to buy a song or not. This public performance fee is separate from the mechanical licensing fees that are a result of sales of music or media containing music—it is usually paid when a song is performed to a live audience, included in a movie you watch at a theater, or broadcast in some way.

"In the US, while we do get paid a mechanical [licensing fee] from ITunes, we are not getting any performance income from Apple yet," David Renzer, chairman and CEO of Universal Music Publishing Group, said in a recent interview. "[On iTunes] you can stream radio, and you can preview [tracks], things that we should be getting paid performance income for. Also, if you download a film or TV show, there's no performance [payment] and typically there's no mechanical [payment] either."

Not so fast, says the Digital Media Association's executive director Jonathan Potter. First, he explains, songwriters are compensated when music is included in film and TV by a method called synchronization rights. These are generally paid by a production company when the music is included. Songwriters also get public performance rights when they are broadcast on TV or played in a movie theater. Second, performance rights aren't paid on downloads because they are for private use.

"They are saying, 'The songwriters aren't getting paid.' Baloney," Potter told CNET. "Songwriters are getting paid. They're paid sync rights and [mechanical] rights. They aren't getting paid for the public performance in a download because there is no public performance in a download."

As far as Internet radio streamed via iTunes is concerned, that's already paid for by the webcasters, which includes independent stations like SomaFM as well as services like Pandora or Last.fm. The multiyear, drawn-out conflict over those fees was settled earlier this year. As for the 30-second previews that iTunes lets customers listen to before buying? Well, it's true that Apple doesn't pay anything for that ability—though it does have a license to stream previews from the record labels—but this hardly seems like it qualifies as a "performance." Potter said that copyright law protects Apple and other music stores from paying a performance fee for letting customers sample the music.

Really, the problem is that more and more media is being consumed for private use than public use, and what was once a revenue stream for songwriters is drying up—much like digital downloads have gobbled away at CD sales for record labels. To make matters worse, songwriters and composers have traditionally given up sync rights in hopes that performance fees would bring in more money. But it doesn't seem fair to try to extend public performance rights to try to close a loophole they themselves created.

Efforts to negotiate for additional performance rights have proven fruitless, and that's why these groups are lobbying Congress to have the law specifically state that downloads involve performance rights. The current laws concerning these rights was passed before the proliferation of digital distribution, and a federal judge ruled in 2005 that streaming does constitute a performance while downloads do not.

We won't argue that policy concerning licensing in general couldn't use some updating for the realities of online distribution, but we have to agree with the basic distinction between downloads—which is like buying a CD or DVD for private use—and streaming—which is clearly akin to broadcasting. And songwriters and other industry professionals need to be aware that the marketplace is changing as well.

"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."